How Upstart Firm Can Outsmart a Giant
The fact that more people around the world use toothbrushes than any other consumer product inspired the founders of Healthgard to develop a new toothbrush-sanitizing solution.
But because they couldn’t compete head-on with the giants of the oral hygiene market, they started selling Brushgard in health food stores. Brushgard, a stable form of hydrogen peroxide, comes in a bottle that acts as a toothbrush holder. Each bottle lasts for about 10 days and costs $1.39.
Entrepreneurs competing nose-to-nose against the Goliaths in their industries say the only way to succeed is to figure out an innovative way to sell your product. Since you can’t outspend a big corporation, you have to outsmart it.
Inglewood-based Healthgard and Pro-Dentec of Batesville, Ark., share the personal products arena with Colgate-Palmolive, Procter & Gamble and Bausch & Lomb. You won’t see ads for Brushgard on television or in magazines.
“I was looking for the path of least resistance,” Jim Grant, Healthgard’s marketing director and an officer of the company, said of the decision to sell Brushgard in 1,800 health-food stores.
He originally planned to introduce Brushgard to hotel guests concerned about bathroom cleanliness. He changed his mind when he met a woman who worked for a natural food chain. She thought Brushgard’s sales pitch--”Fact: Toothbrush bacteria can make you sick!”--might appeal to health-conscious shoppers.
So far, the strategy is working. Managers at several health food stores said customer interest in Brushgard is growing and sales are picking up.
Healthgard Chairman Allen Gelbard said a group of his friends dared each other to come up with the most lucrative consumer product. Seeking guidance from a computer at the Massachusetts Institute of Technology, Gelbard discovered that the toothbrush was the most universal consumer item.
“Toothbrushes cross over all ethnic barriers,” said Gelbard, who previously produced movies and worked in the telecommunications business.
Since the toothbrush and toothpaste market was glutted, he worked with dental researchers to create a related product.
To raise capital, Healthgard recently merged with a public company called American Water Resources. The move brought in about $1 million cash.
While Healthgard is busy cleaning toothbrushes, Pro-Dentec is busy cleaning teeth with Rota-dent, a device that uses a variety of circular brushes to do its job. Pro-Dentec also came up with a creative marketing solution. The company decided to sell Rota-dents directly to dentists after realizing that dental product distributors, which push 2,200 products, could not aggressively sell their line. But selling directly to dentists is not easy.
“The problem is, most dentists think it’s unprofessional to sell things out of their office,” said Bill Evans, Pro-Dentec’s executive vice president and marketing director.
To gain credibility in the dental community, Pro-Dentec sponsors about 100 continuing education seminars for dentists and dental hygienists around the country each year.
“We are selling Rota-dents to one dentist at a time,” said Evans. Evans said dentists, who used to spend most of their time filling cavities, are now focusing on helping patients keep their teeth and gums healthy. The change in direction is a result of widespread use of fluoride treatment--a development that has nearly eliminated cavities.
Pro-Dentec brought Rota-dent to the United States six years ago under a licensing agreement with a Danish company. Dentists charge $90 to $125 for the sleek, hand-held cleaner. The cost includes at least one lesson on how to use the device.
Rota-dent’s closest competitor is the Interplak tooth cleaner, which was acquired by Bausch & Lomb in 1988 and is sold through a variety of retail outlets.
At first, Evans said, the Copenhagen-made Rota-dents experienced terrible quality control problems. To solve the problem, Pro-Dentec acquired the manufacturing rights and moved the factory to Arkansas.
So far, about a million Rota-dents have been sold worldwide, 800,000 in the United States. Pro-Dentec, which has about 150 employees, posted sales of $6.9 million for the first six months of this year.
Each week, the company sends out thousands of brochures to dentists. Its sales team is on the phone to dentists every day. If dentists express interest in the product, they are sent audiotapes or videotapes produced in the company’s in-house studios.
Evans recommends that small-business owners develop their own marketing plan before hiring an advertising agency.
“Save your money until you figure out how to sell it first,” said Evans, who laughs when he recalls the first time he pitched the Rota-dent to dentists.
Hearing that a group of dentists were attending a charity golf tournament at the Lake of the Ozarks Country Club, he and a colleague raced out to the golf course. “I sold 200 toothbrushes from a golf cart that day,” he recalled.
MARKETING BOOKS
There are several good marketing books to help small-business owners gain a competitive edge:
“Big Marketing Ideas for Small Service Businesses,” by Marilyn and Tom Rose.
This comprehensive book includes direct mail tips, advertising campaigns and ways to generate free publicity. The book is published by Dow Jones-Irwin. It is available at bookstores or by sending $27.95 to ABI, Box 1500-SS, Buena Vista, Colo. 81211. It can also be ordered by credit card by calling (719) 395-2459.
“Street Smart Marketing,” by Jeff Slutsky, with Mark Slutsky.
This chatty, informative guide is filled with creative, low-cost marketing tips for businesses. It is published by John Wiley & Sons, 605 3rd Ave., New York, N.Y. 10158. $14.95.
“The Marketing Sourcebook for Small Business,” by Jeffrey P. Davidson.
Davidson, a management consultant, explains how to define your company’s niche in the marketplace and find the right image for your company. He also describes how to become a favored vendor to large corporations. $24.95, published by John Wiley & Sons, same address as above.
